Binance chief Changpeng ‘CZ’ Zhao has suddenly withdrawn his offer to buy Sam Bankman-Fried’s beleaguered FTX exchange.
CZ yesterday sensationally announced Binance would buy FTX after ordering the liquidation of almost $600 million of FTX tokens following arguments with the rival organisation’s founder.
The pair clashed over Bankman-Fried’s comments surrounding how the global cryptocurrency industry should be regulated. The Twitter spat even stirred up rumours of insolvency surrounding SBF’s trading company Alameda Research when leaked accounts showed liabilities worth $8 billion largely made up of unidentified loans.
Then, in an unexpected announcement, Binance’s 45-year-old boss suddenly declared he was preparing to buy FTX – a move which triggered a market-wide collapse.
However, in his statement yesterday, CZ did highlight a caveat of pending due diligence.
“To protect users, we signed a non-binding LOI, intending to fully acquire http://FTX.com and help cover the liquidity crunch. We will be conducting a full DD in the coming days,” he stressed,
Tonight, though, the deal is off – for the reasons alluded to the previous day.
“As a result of corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged US agency investigations, we have decided that we will not pursue the potential acquisition of http://FTX.com,” tonight’s statement read.
“In the beginning, our hope was to be able to support FTX’s customers to provide liquidity, but the issues are beyond our control or ability to help.
“Every time a major player in an industry fails, retail consumers will suffer. We have seen over the last several years that the crypto ecosystem is becoming more resilient, and we believe in time that outliers that misuse user funds will be weeded out by the free market.
“As regulatory frameworks are developed and as the industry continues to evolve toward greater decentralisation, the ecosystem will grow stronger.”